Exxaro earnings up 68%

Johannesburg - South Africa's diversified miner Exxaro Resources [JSE:EXX] on Thursday posted a 68% rise in first-half headline earnings boosted by its coal unit and said it expects a better second half, although risks remain. Exxaro's first-half headline earnings per share rose to 683c from 406c in the comparable period, also boosted by the inclusion of its Mafube joint venture.

Headline earnings are the main profit gauge in South Africa and exclude certain one-off, financial and non-trading items. Revenue for the six months rose 10% to R7.9bn. The company, which mines for coal, mineral sands and some base metals, said it expects earnings in the second half to rise on the back of current economic recovery, although currency fluctuations are expected to pressure earnings.

"The relative strength of the local and Australian currencies could further impact on the results for the second half of 2010 as well," it said.

Coal exports are expected to rise in the second half compared with the first six months of the year, subject to availability of rail capacity.

South African coal exporters have not been able to ship all their coal destined for exports due to constraints on the rail lines leading to the port and despite an expansion of the coal exports terminal to accommodate exports of up to 91 million tonnes per year.

"International demand for hard coking coal is set to remain strong and should support an increase in semi-soft coking coal prices," the company said.

The company also sees positive momentum for its mineral sands business.

"The current shortage of pigment should lead to an increase in prices while demand for mineral sands products is generally anticipated to further improve," Exxaro said.

Exxaro declared an interim dividend of 200c per share.

- Reuters